American dream

9 February 2006

The US is a graveyard for the ambitions of European retailers. But Tesco has smartly chosen not to go headtohead with WalMart. Building a convenience startup on the West Coast will stop the UK retailer from being mangled. And it should be a scaleable idea too.

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Tesco will enter the US through the development of a new convenience format, beginning on the West Coast in 2007. The UK retailer said it will initially invest £250m a year, funded by existing resources, and expects the venture to break even by the end of the second full year.

The new convenience stores will be modelled on Tesco Express stores. Tim Mason, currently the group's marketing and property director, will run the US business.

Tesco already trades in 12 countries, with over half of its space outside its domestic UK market.

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